Income Tax Act 2023
Section 41 - Special Agricultural Income
(as updated till Finance Act 2024)
(1) Without prejudice to the generality of section 40, special agricultural income shall be computed in accordance with the provisions of this section.
(2) If an asset is sold in any income year after being used by the assessee for agricultural purposes under section 40, it shall be computed as follows, namely:—
| Serial No. | Sales Proceeds | The amount of money deemed as income |
| (1) | (2) | (3) |
| 1. | If the sale proceeds exceeds the acquisition value of the asset | The amount equal to A-B shall be deemed as income of the concerned assessee for that income year classifiable under the head ‘Capital Gain’; The amount equal to of B-C shall be deemed to be income of the concerned assessee for that income year classifiable under the head ‘Income from Agriculture’; |
| 2. | If the sale proceeds does not exceed the acquisition value of the asset, but exceeds written down value | The amount equal to A-C shall be deemed as income of the concerned assessee for that income year classifiable under the head ‘Income from Agriculture’. |
(3) Where any amount received as insurance, salvage or compensation any income year in respect of any asset which having been used by the assessee for agricultural purpose is discarded, demolished or destroyed and the amount of such moneys exceed the written down value of such asset, the said amount shall be included under the head income from agriculture as described below, namely:—
| Serial No. | Sales Proceeds | The amount of money deemed as income |
| (1) | (2) | (3) |
| 1. | If the amount from insurance, salvage or compensation exceeds the acquisition value of the asset | The amount equal to A-B shall be deemed as income of the concerned assessee for that income year classifiable under the head ‘Capital Gain’; The amount equal to B-C shall be deemed as income of the concerned assessee for that income year classifiable under the head ‘Income from agriculture’. |
| 2. | If the amount for insurance, salvage or compensation amount does not exceed acquisition value of the asset, but exceeds the written down value | The amount equal to A-C shall be deemed as income of the concerned assessee for that income year classifiable under the head ‘Income from Agriculture’. |
(4) For the purposes of this section,—
A = the sale proceeds of the asset or, as the case may be, the proceeds of insurance, salvage or compensation against the asset,
B = acquisition value of assets, and
C = the written down value of asset after allowing for depreciation under Third Schedule.
(5) As per column (2) of the tables in sub-sections (2) and (3), if the difference between the sale proceeds or, as the case may be, the amount received on account of insurance, salvage or compensation and the written down value of the asset, is negative, the amount shall be deemed to be spent on “Income from Agriculture”, and shall be included under the allowable general deduction.
Disclaimer: This is the authentic English text of the Income Tax Act 2023, as published under SRO No. 404-Law/2025 dated 08 October 2025. In the event of any inconsistency or conflict between the content on this website and the official Government publications or gazette notifications relating to laws, rules, regulations or SROs, the official Government publications and notifications shall prevail.